Tag Archive for: RUSSIA

Oil prices are poised for a pullback after OPEC announces its output cut decision

/, ,

From CNBC / Tom DiChristopher / 28 de noviembre de 2017

 

Market watchers see few opportunities for oil prices to rally — but plenty of room for them to fall — after a critical meeting of energy ministers later this week.

About two dozen oil exporters, including top producers Saudi Arabiaand Russia, meet on Thursday in Vienna to discuss extending a deal to keep 1.8 million barrels a day off the market. The historic agreement has helped to reverse a three-year oil price downturn that wiped out hundreds of thousands of energy jobs and piled financial pressure on both free market American drillers and countries dependent on oil revenue.

The market largely expects the 14-member OPEC cartel and a group of other producers led by Russia to extend the deal, which began in January and expires in March, through the end of 2018.

But just days before meeting, Russia has not committed to the nine-month extension, raising concerns that OPEC could settle for a shorter extension or push off a decision altogether. Either of those scenarios would spark a sell-off, analysts say, but oil prices will probably struggle to grind higher from recent 2½-year highs even if OPEC lives up to expectations.

Here’s how analysts expect markets to move under three scenarios.
OPEC extends by nine months
Andy Lipow, president of Lipow Oil Associates, expects OPEC to lock down the nine-month extension. But he also expects a pullback on the news.

The reason: Hedge funds have recently increased their long positions in oil futures, or bets that prices will keep rising. That makes prices vulnerable to a slide because traders often book profits by selling high. At the same time, the number of oil rigs operating in U.S. oil fields crept up in November, a trend that tends to weigh on prices.

“The market has gotten very, very long and as a result you can have some profit-taking triggered by the increase in the rig count on Friday,” Lipow said.

Tom Kloza, global head of energy analysis at Oil Price Information Service, also thinks a nine-month extension has been baked into prices, making it hard for U.S. West Texas Intermediate crude to rally beyond Friday’s 2017 intraday high of $59.05.

“We may look back at Black Friday as the as-good-as-it-gets number for U.S. producers,” he said.

U.S. crude could take another run at the $59 per barrel level, but OPEC would have to get the messaging just right, said John Kilduff, founding partner at energy hedge fund Again Capital. That includes a show of unity among regional geopolitical rivals Saudi Arabia and Iran and a clear signal that OPEC will force member countries Libya and Nigeria to cap their output after giving them a pass this year.
OPEC settles for six months
However, Kilduff thinks OPEC will only be able to commit Russia to a six-month extension.

He said the country’s energy companies have pushed back on Russian Energy Minister Alexander Novak and President Vladimir Putin as U.S. producers pick up market share in Asia, an important oil growth market. Russian energy giants are concerned that extending the cuts prematurely could leave the market undersupplied, causing a spike in prices that leads to another crash.

“If they do go six months I would expect them to spin it and say they’re going to review it next year,” Kilduff said. “That’s going to be seen as a disappointment.”

In that scenario, Kilduff sees oil prices falling back to the mid-$50 range.
Barclays expects either a six- or nine-month extension but says the market is asking the wrong question. Michael Cohen, the investment bank’s head of energy markets research, says traders should be asking whether exporters will be held to the same production caps they agreed to last year.

“It would be a misguided assumption in our view to expect the group’s production quotas to remain set in stone in 2018,” Cohen said in a research note Monday. “The sustainability of the deal depends on how much longer Saudi Arabia, Russia, Iran and Kuwait are willing to sacrifice market share in the pursuit of revenue and market stability.”

 

From CNBC / Tom DiChristopher / 28 de noviembre de 2017

Trade turnover between Russia and Mexico grows by more than 40%

/,

From: TASS / MEXICO CITY, October 23

Trade between Russia and Mexico demonstrates a positive trend in 2017, Russian Export Center CEO Petr Fradkov said on Monday at the opening of a business mission in Mexico City.

“In 7 months of 2017, the trade turnover between our countries has grown quite actively,” said Fradkov, adding that the growth surpassed 40%. He noted that out of $1.5 bln of trade turnover for this period, almost $1 bln accounts for non-resource exports.

This includes exports of machinery, food products and other non-oil and gas materials,” Fradkov added.

The Russian delegation includes Minister of Industry and Trade Denis Manturov, President of United Aircraft Corporation (UAC) Yuri Slyusar, and representatives of a number of companies from various industries.

 

 

From: TASS / MEXICO CITY, October 23

Oil Investors Ease Back as Market Steadies Before OPEC Talks

/

Oil investors are playing it safe as OPEC hammers out the details of a deal to trim output.

Money managers reduced bets on falling prices to the lowest since May as oil held above $50 a barrel, prolonging a rally that began when the Organization for Petroleum Exporting Countries announced a deal to cut production to between 32.5 million and 33 million barrels a day. The group plans to finalize the agreement at a meeting in Vienna on Nov. 30.

“The shorts are not laughing off this OPEC deal anymore,” Phil Flynn, a market analyst at Price Futures Group in Chicago, said in a phone interview. “There’s a growing realization that there’s going to be a deal to lock in production. Things will be relatively calm until we get the agreements.”

Saudi Arabia’s Energy Minister Khalid Al-Falih said Oct. 19 that many nations are willing to join OPEC in cutting production. So far, Russia has said it’s considering taking steps to stabilize the market. Alexander Novak, the country’s energy minister, said Sunday that “many scenarios” are being discussed. Venezuelan President Nicolas Maduro, on a tour of oil-producing countries to boost support for the deal, said Oct. 21 he’s in favor of inviting the U.S. to the next OPEC meeting and creating an “alliance” of OPEC and non-OPEC nations.

“This week the market is in a pause after the run-up to $50,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There’s still a lot of question about what OPEC is actually going to do next month. Absent that, people are waiting for some more direction than we have now.”

In addition to slashing short bets in West Texas Intermediate crude by 21 percent during the week ended Oct. 18, hedge funds also reduced their long positions by 3.2 percent from a two-year high, according to the Commodity Futures Trading Commission. Net longs increased to the highest in two years.

Oil Inventories

WTI slipped 1 percent during the report week to $50.29 a barrel. The U.S. benchmark rose 0.1 percent on Monday to $50.91 as of 9:41 a.m. London time. Prices reached a 15-month high on Oct. 19 after government data showed U.S. crude stockpiles fell to the lowest level since January.

U.S. stockpiles dropped 5.25 million barrels to 468.7 million in the week ended Oct. 14, according to the Energy Information Administration, after reaching 512.1 million in late April.

“$50 will be the floor through the OPEC meeting, barring some spike in the dollar,” Price Futures Group’s Flynn said. “With U.S. inventories falling at a rapid pace, the prospect of a cut or freeze has real consequences.”

In other markets, net-bullish bets on gasoline rose 9.4 percent to 40,085 contracts, the highest since March 2015, as futures climbed 1.5 percent in the report week. Ultra low sulfur diesel net-longs fell 7 percent to 8,439. Futures slipped 1.2 percent.

WTI held above $50 a barrel even as Russia’s energy minister said the country may produce a new oil-output record next year. As OPEC members head into technical meetings Oct. 28-29, investors will be watching for details on country allocations. Iraq should be exempted from cutting production, Oil Minister Jabbar Al-Luaibi said Sunday.

“The market just wants to see the proof in the pudding,” said Carl Larry, director of oil and gas at consultant Frost & Sullivan in Houston. “We got to $50. That’s as good as it’s getting, going into the November election and the actual OPEC meeting.”

 

 

Copyright: Bloomberg.

Russia’s giant Vankor oilfield reaches peak production level: ONGC

/

Russia’s giant Vankor oilfield, where Indian state oil firms are acquiring a significant stake, has reached peak production level, but technology to increase oil recovery will optimise the output and delay its decline, the head of ONGC’s overseas arm said. 

Indian state firms hope to get 10.5 million tonne of crude oil from Vankor once deals are completed to acquire 49.9 % in Russia’s second-largest oilfield, whose output of 21million tonne a year is about the same as ONGC’s entire production from all its Indian fields. Rosneft had announced in March last year that Vankor’s output would decline slightly from the plateau level of 22 million tonne a year. 

“We had entered at the peak production level, and as it happens in all oil fields, this field too will undergo a decline. But with the application of enhanced oil recovery techniques, the decline can be delayed and production optimised,”

ONGC announced a deal to buy 15% stake in the Vankor last year, and is in talks to raise that to 26%. This month, a consortium of Indian Oil Corporation, Oil India and Bharat Petroleum struck a deal to acquire 23.9% in Vankor. Official sources said ONGC paid $1.27 billion, while the consortium spent $2 billion for the bigger stake, giving the same valuation to the giant field. 

Last week, Rosneft said the “achieved evaluation” of the Vankor project was $3.3 per barrel of reserves. Recoverable reserves of Vankor, the largest field commissioned in Russia in the last 25 years, stood at 361 million tonne of oil and condensate and 138 bcm of gas as of January this year.  

India and Russia have intensified energy engagement over the past year.

Copyright: The Economic Times

Abu Dhabi’s Oil Chief Sees Crude Market Balancing by End of 2017

/

Oil markets will probably balance by the end of next year, with prices rising in the medium term, according to Sultan Al Jaber, the new head of Abu Dhabi National Oil Co.

Prices, which have swung between highs of about $42 a barrel and lows of about $27 this year, will continue to be volatile in the short term, Al Jaber said in an interview with Abu Dhabi dailies The National and Al Ittihad.

Al Jaber, named the company’s chief executive officer last month, expects “to see a slow but upwards improvement in prices in the medium term,” according to a transcript of his comments published in The National. “2016 and 2017 will be the years during which markets will start to rebalance the gap between demand and supply.”

Abu Dhabi, the capital of the United Arab Emirates, holds about 6 percent of the world’s oil reserves. The U.A.E., a member of the Organization of Petroleum Exporting Countries, is among at least a dozen states that have said they’ll meet in Doha, Qatar, on April 17 to discuss a potential freeze in oil output to stabilize prices. European benchmark Brent crude slipped 0.7 percent to $38.41 a barrel as of 9:34 a.m. in London.

Adnoc, as the state company is known, is taking “into consideration prevailing market conditions” as it works toward a target to boost production capacity to 3.5 million barrels a day, Al Jaber said, without specifying the date when that level would be reached. The company is maintaining its current production level and aims to “remain a reliable supplier.”

The U.A.E. pumped about 2.89 million barrels a day last month, according to data compiled by Bloomberg. Abu Dhabi had been seeking to boost capacity to 3.5 million barrels daily by the end of 2017, while company officials have said the target may not beachieved until 2019.

Copyrigth: Bloomberg

 

Russia says better Iran-Saudi Arabia ties would help oil prices: RIA

/

Russia wants to see improved relations between Iran and Saudi Arabia at a time when joint action is needed to influence global oil prices, the RIA news agency on Monday quoted Zamir Kabulov, a senior official at Russia’s Foreign Ministry, as saying.

Russia, one of the world’s top oil producers, has repeatedly refused to cooperate with the Organization of the Petroleum Exporting Countries in recent years despite the falling price of oil, the lifeblood of its economy.

Any hope of sealing a global output deal has so far foundered on Iran’s position. Tehran is boosting production to try to regain market share after sanctions were lifted, paving the way for it to re-enter the market after a long absence.

The prospect of cooperation between Iran and leading producer Saudi Arabia is further complicated by the fact that the two countries are geopolitical foes who support different sides in conflicts in both Syria and Yemen.

“We all need stability on the oil market and a return to normal (crude) prices,” RIA quoted Kabulov as saying.

“And these are the key nations, especially Saudi Arabia and Iran, which is striving to return to the oil market, anticipating the removal of sanctions.”

Some OPEC countries are trying to achieve a consensus among the group, while some non-members back an oil production freeze, sources familiar with the discussions said last week, a possible attempt to tackle the global glut without cutting supply.

Top exporter Saudi Arabia might be warming to the idea, though it was too early to say whether it would give its blessing because any deal would mainly depend on a commitment by Iran‎ to curb its plan to boost exports, the sources said.

Even as officials on both sides discussed the possibility, Russia and OPEC continued to pump oil at some of the highest levels in recent times last month, suggesting both were locked in a fierce struggle for market share.

Benchmark Brent crude LCOc1 has fallen around 70 percent since mid-2014

OIL PRICES ARABIA

Copyright: Reuters